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Teacher Retirement System of Texas Overview of TRS Revised October 2013

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TRS is a 401(a) Defined Benefit Plan Retirement benefits are calculated based on a formula established by law and funded by Member Contributions (6.4%) State Contributions (6.8%) Investment Earnings

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Refund of Your TRS Contributions You may withdraw the accumulated contributions in your member account if you: Permanently terminate all employment with all TRS-covered employers, and Have not applied for or received a promise of employment with the same or another TRS-covered employer

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Calculating Your Standard Annuity The Formula Average of highest three or five annual salaries Total years of Service Credit x 2.3% = Total % Total % x Average Salary = Annual Annuity Annual Annuity ÷ 12 = Monthly Standard Annuity

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Employment eligible for membership in TRS is: Covered Employment Employment expected to last 4 ½ months or more, For one-half or more of the full-time workload, and With compensation comparable to the rate of compensation for other persons employed in similar positions

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Establishing TRS Service Credit To earn a year of service credit, you must work in a TRS- eligible position for: A minimum of 90 days during the school year, or The full fall semester in the last school year before you retire Service credit is an important component in determining eligibility for TRS benefits and is part of the retirement formula.

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Service Credit Eligible for Purchase Withdrawn Service Unreported Service Substitute Service Out-of-State Service Developmental Leave Active Duty Military Service USERRA Service (Uniformed Services Employment and Re- employment Act) Career and Technology Work Experience State Sick and/or Personal Leave Membership Waiting Period

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TRS / ERS Transfer of Service Transfer takes place at retirement ERS members with at least 36 months of ERS service credit can transfer their TRS service credit to ERS TRS members with at least 3 years of TRS service credit can transfer their ERS service credit to TRS

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Proportionate Retirement A member who has active membership credit in more than one Texas Public Statewide Retirement System may be eligible to combine all of their service credit to satisfy eligibility requirements to retire under TRS. Retirement systems currently participating are listed in your handout

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What is My Tier? TRS has designed membership tiers that correspond to the different categories of membership to help you better understand the requirements and reductions that apply to you The membership Tier that applies to you is determined by: The date you entered your current TRS membership, Your grandfathered status, and The amount of service credit you have on 8/31/14 Changes to the retirement plan over the years have resulted in several distinct membership categories, each with its own retirement eligibility requirements and early-age reductions

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Are You Grandfathered? (2005 legislation) You are a grandfathered member, under 2005 legislation, if you met at least one of the following criteria as a member of TRS before September 1, 2005: You were at least 50 years of age, Your age and years of service credit totaled at least 70, or You had at least 25 years of service credit

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Calculation of Benefits

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2014 Five Year Service Credit Requirement Applies to all members who do not have 5 years of service credit by 8/31/2014, and new members on or after 9/1/2014 All members who have 5 years of service credit by 8/31/2014 are not subject to the new normal retirement eligibility requirements Withdrawn, unreported, and substitute service credit must be purchased in full by 8/31/2014 to be used to determine a members normal retirement eligibility status Recent legislation increases the normal retirement eligibility to age 62 with the Rule of 80 and at least 5 years of service credit August 2014 SUNMONTUESWEDTHURSFRISAT

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Tier 1 Grandfathered (2005), current membership began prior to 9/1/2007 and at least 5 years of service credit on 8/31/2014 Normal-Age Retirement Eligibility 65 with at least five years of service credit, or Meet the Rule of 80 and have at least five years of service credit Early-Age Retirement Eligibility At least age 55 with five or more years of service credit, but do not meet the Rule of 80, or 30 or more years of service credit, but do not meet the Rule of 80

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Tier 2 Not Grandfathered (2005), current membership began prior to 9/1/2007 and at least 5 years of service credit on 8/31/2014 Normal-Age Retirement Eligibility 65 with at least five years of service credit, or Meet the Rule of 80 and have at least five years of service credit Early-Age Retirement Eligibility At least age 55 with five or more years of service credit, but do not meet the Rule of 80, or 30 or more years of service credit, but do not meet the Rule of 80

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Tier 3 Not Grandfathered (2005), current membership began on or after 9/1/2007, but prior to 9/1/2014, and at least 5 years of service credit on 8/31/2014 Normal-Age Retirement Eligibility 65 with at least five years of service credit, or At least age 60, meet the Rule of 80, and have at least five years of service credit Early-Age Retirement Eligibility At least age 55 with five or more years of service credit, but do not meet the Rule of 80, or 30 or more years of service credit, but do not meet the Rule of 80, or Meet the Rule of 80, but less than age 60

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Tier 4 Grandfathered (2005), current membership began on or after 9/1/2007, but prior to 9/1/2014, and at least 5 years of service credit on 8/31/2014 Normal-Age Retirement Eligibility 65 with at least five years of service credit, or At least age 60, meet the Rule of 80, and have at least five years of service credit Early-Age Retirement Eligibility At least age 55 with five or more years of service credit, but do not meet the Rule of 80, or 30 or more years of service credit, but do not meet the Rule of 80, or Member meets the Rule of 80, but is below age 60* * At least age 55, but less than age 60, meet the Rule of 80, and have at least 20 years of service credit (no reduction to annuity due to subsidized tables, but considered early-age)

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Tier 5 Not Grandfathered (2005), current membership began on or after 9/1/2014 or did not have at least 5 years of service credit on 8/31/2014 Normal-Age Retirement Eligibility 65 with at least five years of service credit, or At least age 62, meet the Rule of 80, and have at least five years of service credit Early-Age Retirement Eligibility At least age 55 with five or more years of service credit, but do not meet the Rule of 80, or 30 or more years of service credit, but do not meet the Rule of 80, or Meet the Rule of 80, but less than age 62

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Tier 6 Grandfathered (2005), current membership began on or after 9/1/2014 or did not have at least 5 years of service credit by 8/31/2014 Normal-Age Retirement Eligibility 65 with at least five years of service credit, or At least age 62, meet the Rule of 80, and have at least five years of service credit Early-Age Retirement Eligibility At least age 55 with five or more years of service credit, but do not meet the Rule of 80, or 30 or more years of service credit, but do not meet the Rule of 80, or Member meets the Rule of 80, but is below age 62*, or Member meets the Rule of 80, is age 61, and has less than 20 years of service credit *At least age 55, but less than age 62, meet the Rule of 80, and have at least 20 years of service credit (no reduction to annuity due to subsidized tables, but considered early-age)

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Calculating Your Standard Annuity The Formula Average of highest three or five annual salaries Total years of Service Credit x 2.3% = Total % Total % x Average Salary = Annual Annuity Annual Annuity ÷ 12 = Monthly Standard Annuity

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Disability Retirement As a member, regardless of your age or years of service credit, you may apply for disability retirement if: You are mentally or physically disabled from the further performance of your duty, and Your disability is probably permanent Please contact TRS for additional information.

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Group Long Term Care Insurance Program Genworth Life is the underwriter of the group long-term care insurance program for public school employees, retirees, and eligible family members

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Active Member Death Benefits As an active member, your coverage for TRS death benefits became effective on your first day of TRS- covered employment Upon your death, your beneficiary/beneficiaries may be eligible to select from five different payment plans Being familiar with how to request TRS death benefits can greatly ease matters for your beneficiaries at a difficult time in their lives